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Updated from 10:58 a.m. EST with video interview and settlement prices



) --

Gold prices rose Tuesday as investors took to short-covering on the yellow metal.

Gold for February delivery rose $7.90 to settle at $1,660.80 an ounce at the Comex division of the New York Mercantile Exchange. The

gold price traded as high as $1,665 and as low as $1,653.50 an ounce, while the spot price was tacking on $8.50, according to Kitco's gold index.

"Thousands of contracts of 1700 strike puts were in the money and so short covering ensued this morning to re-align portfolios," George Gero, precious metals strategist at RBC Wealth Management, wrote in a note on Tuesday. Gero also said in a phone interview that Monday's report of December durable goods orders, which came in better than expected, suggested the economy has been on the mend -- a signal that more buying could be somewhat inflationary in the near term.

Silver prices for March delivery gained 40 cents to close at $31.18 an ounce, while the

U.S. dollar index was dipping 0.24% to $79.57.

Gold investors were looking ahead to a busy week for the precious metal as the

Federal Reserve

releases its Federal Open Market Committee meeting announcement. Traders will be looking for any new language about the length of time for continuation of quantitative easing programs.

Friday marks the first day of February, which means the Bureau of Labor Statistics will report the January unemployment rate and nonfarm payrolls. With the Fed's low-interest rate policy tied to a 6.5% unemployment rate target, gold investors will be watching for any dip in the current 7.8% rate to gauge how much longer they expect the central bank to continue monetary stimulus.

The Institute for Supply Management's manufacturing Index is released on Friday. Any improvement in the report would suggest continued progress in economic recovery, which could be negative for gold prices.

Gold mining stocks were mostly higher on Tuesday. Shares of

TheStreet Recommends

Yamana Gold

(AUY) - Get Yamana Gold Inc. Report

were adding 2.2%, and shares of



were rising 1.9%

Among volume leaders,

Barrick Gold


was off 0.26%, but

Kinross Gold

(KGC) - Get Kinross Gold Corporation Report

was climbing 2.2%.

Gold ETF

SPDR Gold Trust

(GLD) - Get SPDR Gold Shares Report

was up 0.45%, while

iShares Gold Trust

(IAU) - Get iShares Gold Trust Report

was increasing 0.53%.

-- Written by Joe Deaux in New York.

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